Goals masquerading as strategy is an incredibly common problem. Good Strategy Bad Strategy is my favorite treatment of the problem. Unfortunately a lot of executives don’t like to be told they are suppose to take responsibility for strategy. Here is an article length version from the author: https://www.mckinsey.com/business-functions/strategy-and-cor...
One of my issues with OKRs is the oft-repeated line that the goals should be so audacious that you should only expect to achieve about 70% of them.
If you're following this advice, you are either purposefully choosing goals that you do not know how to achieve, which is a problem, or purposefully choosing goals whose achievement relies on way too many externalities over which you have little control, which is a problem.
I'm not saying external factors shouldn't be considered, or that we should only set goals that are within comfortable reach.
Rather, I'm saying the uncertainty should be accounted for differently. It should be baked into our goals, not treated as if it only matters at the OKR level.
Imagine if you were to plan a sprint, and your story points did not factor in uncertainty at all. Then, you committed to a sprint size that also did not take into account uncertainty. But your stakeholders agreed that a 30% sprint failure rate was acceptable.
Now imagine baking in uncertainty into your estimates and then committing to a sprint size you can realistically hit. Add stretch goals if you want. Doesn't that seem more sensible?
> purposefully choosing goals that you do not know how to achieve, which is a problem
Purposefully choosing goals that you don’t yet know how to achieve is one of the powers of OKRs; they’re not meant to be limited to project plan-style marches towards a known outcome.
Take the classic YouTube “one billion hours in daily user watch time” by the end of 2016, which was about a 10x multiple over their 2012 stat. There’s no way they knew how to reach that goal, but the objective helped them to align and constantly make small decisions in support of that goal (instead of other conflicting goals, each of which could be argued to be good for Google in a different way).
Did somebody in the room say, "We've crunched the numbers, and our best estimation is that if we orient all our resources toward achieving this goal and put forth our best possible effort, we'll be able reach 5x."
And then did somebody else in the room say, "I agree. So let's be extremely audacious and shoot for 10x"?
Either the first person was miscalculating or the second person was being unreasonable.
As per the spirit of parent's question - either you're assuming something impossible, or you're setting a goal to achieve something that is possible (in which case why haven't you scoped it out clearly & sanely).
It's a mix of product/tech knowledge, calculations upstream of how much Google needs from the YouTube business, and some savvy in understanding the people in the YouTube organization. Another mix of people in the same situation would probably come up with a different number, and neither would necessarily be wrong, or necessarily under- or over-analyzing relative to their capabilities.
After reading this, I feel like my company has been mis-using OKR's. We're always asked to make 3-month team OKR's plus personal OKR's under the same guidelines (70% achieved is doing good). It always felt like cargo-culting to me. No one was ever enthusiastic about them.
I’ve heard that too, but for me it registered as a way of shaking people free of their fear of writing down their true objectives, lest they find themselves on the hook for missing it. Something along the lines of ‘What would you do if you were not afraid?’
I think the analogy to a sprint plan is perhaps misplaced: the point of an objective is not to break down the work for planning purposes but to capture the strategic imperative.
A issue is that not all orgs that try to push OKRs understand this.
I've been places that try to push OKRs and all this blue sky thinking type stuff, but then want to have monthly status check-ins on if OKRs are being hit & why not.
My interpretation of the 70% isn’t that you set 10 OKRs and it’s considered a success if you don’t achieve 3 of them.
Instead it’s that you set targets in the various key results, normalize them to a 0-1 scale, and if you’ve achieved an average of 0.7 over all of the key results, then that would still be a measure of success.
Honest question: are you choosing "goals" that are audacious or setting key results that are audacious?
We do the latter and there is deep suspicion if you are hitting 100% on your OKRs. I always thought of them as signifying direction versus destination, is this incorrect?
> If you're following this advice, you are either purposefully choosing goals that you do not know how to achieve, which is a problem
Over the past 20 years that describes the vast majority of my goals. That's how you get paid big bucks - by taking on goals you don't know how to achieve, and then achieving them, or at least making a good enough try. Colloquially this is known as "problem solving", and hard stuff is expensive.
I think of Steven Covey's "Begin with the End in Mind".
There really are some metrics that are strategic. But when your manager is asked to have 20 OKRs just because your manager has to have 20 OKRs and then you get asked to have 20 OKRs that is a distraction.
(In terms of strategy there might be one thing or three things you REALLY need to do.)
At one place I worked I was expected to create OKRs for my own personal and professional development and I felt offended by it because it was out of phase with my own needs.
Today I do a lot for personal and professional development and it is highly strategic, it's motivated by being better at what I do for work but also about getting the social opportunities I want and where I think technology is going over the next ten years.
Because it is strategic I am continuously finding that a project I started a year ago has given me exactly the resource I need right now for a situation I had no idea I'd be in.
Like hell I need to fill out a form in some artificial format for my boss about it.
I think of Steven Covey's "Begin with the End in Mind".
This has been a point of struggle lately in my career; I know exactly the source you’re quoting and it’s paid dividends in my own ability to deliver and manage teams when I was an engineering manager
and yet
I’m finding a lot of frustration lately-having intentionally gone back to working as an individual contributor-with jobs where a leader takes on a massive undertaking of a task, or decides to start picking at a particularly nasty process/business/engineering scab, making it my priority, but giving no guidance on what “done” means or looks like (aka: acceptance criteria). Even when I blatantly, directly, and simply ask.
It’s difficult to know where you stand in terms of an OKR deliverable when you have a definition of “done”, but stakeholders are preventing any kind of hand-offs or closure to the project when they have a different definition of “done” but are avoidant in sharing what it is and where your deliverable comes up short.
Got an open-ear and open-mind on ways to better ‘manage up’ on this tangent.
You need a definition of done for your definition of done. (e.g. your requirements for the requirements they give you.)
It's an essential part of integrating with a team that you are able to get good requirements. Maybe you can get them to express requirements in a way you like. In some cases I've gotten written requirements that were inadequate but developed some process like "ask a few questions", "write my own version of the requirements and send it back for approval")
Perhaps. My challenge probably lies in finding out what my requirements are, it sounds like.
In the situation I’m dealing with presently, I don’t necessarily need this stakeholder to take any action other than make a decision on two similar options with different outcomes only they have the business authorization to make.
For my part, I’ve documented, and shared documentation with the stakeholder, and had multiple sessions with them about requirements and next steps to complete this project, and asked them repeatedly if there was anything that prevented us from moving to the next step. Each time the answer is no. By every measure I’ve tried so far, it seems there’s no question marks or missing inputs from me on actually executing the next phase of this work, and the stakeholder understands the options/risks/trade offs by their own admission…
Yet when I ask “then what is your decision on these two options for the next step?”, we end up going back to questions if the previous requirements have been met-which we already found a consensus that they were and the stakeholder suggesting we aren’t ready until those are met.
It feels…cyclical.
—-
a forced analogy: it’s like you and your friend are working together to build a custom bike, your friend knows a little about bikes, but asked you for help because you really know bikes, and after you finish putting the bike together, the last thing to do is wrap up the handle bars, so you ask your friend what color grip tape they want, but they start asking you if the tires have been inflated.
My current approach to situations like these are based on “Never Split The Difference” by Chris Voss and “SPIN Selling” by Neil Rackham. For me, I’m trying to identify what the other party _really_ wants, rather than what they _say_ they want.
All too often I’ve taken the other person at their word: “we want to reduce time to approval”, “we want all these features”, “we want to reduce operating expenses”. However, when time came to implement a plan to hit those goals, it turned out those weren’t the actual objectives.
A combination of sales, negotiation, and an attempt to identify the actual underlying need (belonging, recognition, autonomy, etc) has increased the hit rate.
But, at the end of the day, we’re monkeys wearing pants trying to squirt ideas at each other via flapping meat. Let’s just be amazed that communication between people can happen at all :)
I know the relative power dynamic can complicate things... but, it sounds like you need to stand up for yourself more. Tell the stakeholder that no more work will be done until a decision is made. You have done your part, the stakeholder has the authority to make the decision so on their head be it.
If that doesn't work then you have three options: escalate to their boss, live with it, or quit.
Cycles are why people are afraid to get lost in the wood at night.
Theseus escaped the maze of the Minotaur because he had a tool to avoid cycles.
You need to document cycles as soon as you notice them and be polite but firm and ready to have the same conversation over and over again, documents in hand, making it clear that there are a few difficult issues that aren't staying resolved.
Sometimes you need a written and/or practiced explanation of something difficult that you or your customer have a hard time remembering.
Sometimes the customer really wants things that are contradictory and that's a common situation, in the long term the contradiction is resolved, sometimes you might be in a "pick 2 out of 3 situation" and might be able to try a few different pairs of 2 you can live with.
It is is one thing to be in a state of confusion that is tractless, but frequently there are a small number of persistent problems and those have to be kept on the surface.
It sounds like the stakeholder doesn't know what they want, which is why you are stuck in this Ground Hog day process of meetings.
Is this a decision that could easily be reversed? If that's the case, then if a bad decision is made, well it could be reversed pretty quickly. If this is the case, then I would just try to gently recommend the option that seems right to you. You might even suggest to the stakeholder that it's their idea and give them credit for coming to a reasonable conclusion.
You've solved the software engineering problem, now you need to solve the social engineering problem.
Writing OKRs is useful. Strict grading of OKRs is worse than useless.
During the year (or quarter), your picture of what's useful and feasible becomes more and more precise. So your OKRs that you wrote at the beginning are worse than your current knowledge of the true goals. It's really bad to cling to your old misconceptions of what was important when you wrote those OKRs.
Finally, the desire to quantitative-ize every OKR is beyond harmful. Does your organization really not care about anything qualitative? Well, it shows in your products. And no, you can't measure quality by surveying your users and averaging the results.
The converse problem is a variant of the Texas Sharpshooter where, as you progress through the time period, you refine your goals to be closer to what is happening in the business, much like aligning the shadow of a batted ball to the ball. Eventually, those things inevitably converge and the updated goal is always achieved. According to the green OKR report anyway.
You shouldn’t stick overly stubbornly to bad goals, but any updating of goals in the time period should be carefully considered as well.
I think you can even back it up further; the real value is in defining the problem statement that the OKR addresses. The resulting OKR is just one of the many paths, and measuring results against it useful for indicating your efforts but not really progress.
I agree with you on the quantitative mania. I'm not that clever but even I can frame almost any bias so it's "backed up by data". If "listen to the science" is today's new religion, our "evidence-based decision" is an opinion in disguise.
If it does show in the product, shouldn't there be a way to quantify it?
It seems to me that the problem with OKR is that it's hard to formalise goals, the same way it's hard to formalise requirements when designing a product.
Does not imply it's not desirable to do so.
For example, Facebook is dying because they focus on engagement and ignore enjoyment. You can measure engagement, so it fits neatly into a key result, but enjoyment is hard to measure, so the entire company is blind to it.
Completely agree. Measurable results go hand in hand with quick reports and pretty graphs, but they fail to capture so many things. I think this is replaced by vision, trust and transparency: if competent people (or at least competent leaders) share a vision, they will make it happen.
The next iPod or iPhone won't happen due to an OKR.
Sure, no need to give me examples because I've seen plenty on my own.
Still, I don't think we should abandon the idea of basing our decisions on data just yet. Bad metrics are efficiently worsening products and work culture, but the solution is better metrics, not going back to HiPPO.
Yep and Intel is doing great with their incompetent management. These management tools can only work when there is a mission, common sense, competence, team work, respect for each other, and many more attributes rarely seen in corporate America. As the author and Warren Buffet said: “I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”
Good point - a company I worked at introduced (and later tweaked because they couldn't get it right, then later abandoned) OKRs and no one who made that decision would have known what was going on at Intel - they just saw the name of a big company and assumed it must be good.
I suppose the author is - in business language - describing the problem that data driven goal setting makes an organisation chase local maxima.
I definitely agree! Seen more than one company go down from this. I guess part of the issue is that established companies have a tendency of being too risk averse to dare chasing the global maximum.
I think they are saying a little more than that. From what I gather, they are trying to distinguish the concept of an objective from strategy. An objective is something that is desired to be achieved, something that indicates the business is running well. It is merely a target and does not specify how that target can be achieved. Strategy is what gives direction as to how a target can be reached and sort of a framework under which they can operate.
I think what they are arguing is that businesses sometimes define objectives without having a strategy. In such a situation there will be a hundred different ways how the objective can be achieved but no direction on which way to pick and each pulling the business in different directions.
I agree that it is quite business language heavy. My understanding could be wrong, take it as a non-business guy's interpretation.
It's more like companies lose sight of the what/how distinction. It's like this:
Objective: End the war with the Machines
Key Result: Neo is delivered to the Source so he can set us all free
Q. What's missing?
A. Strategy:
1) Rescue the Keymaker from the Merovingian
2) Blow up the power station and the emergency backup to disable the alarms
3) Infiltrate the building and have the Keymaker unlock the right door
4) Etc.
And without that third bit you're lost. It's good to have a goal, it's good to have things you can check to see how far along you are, but you need to map out what must be done to achieve forward progress also. A lot of companies confuse the journey for the destination and set OKRs without mapping out how that may be done. Or maybe they leave the how to lower levels, who I guess set OKRs of their own and delegate the how to their subordinates, etc.? I dunno.
For strategy, the best quick start I've seen is a strategic balanced scorecard, and it leads directly to OKRs and KPIs.
Describe what your organization/project will look like, at an agreed future date, such as one year from now. 1. What are the financial highlights such as sales and investments? 2. What are the external highlights such as customers and vendors? 3. What are the internal highlights such as processes and employees? 4. What are the learning and growth areas such as research and upskilling?
And when it all hits the fan, blame and fire the "bad apples" (low level employees), not the people who created the incentive system that turned thousands of low wage earners into "bad apples".
OKRs are definitely one of the best ways to measure. Two difficult problems to think about during implementation:
1. How to fairly evaluate whether the O is an audacious goal or not across employees. Employee A can make a truly audacious goal and employee B can make a seemingly audacious goal but actually very achievable with moderate efforts. I think it is gonna be quite difficult when you have lots of employees.
2. How do you grade people fairly ? Most companies will not be able to resist connecting your key results to commission/bonus. As a result ,employees setting truly audacious goals will be disadvantaged. If it is truly audacious, it means it has a smaller chance of success. Sooner or later, people will try to game the system if they don't want to be hurt by the system.
Why the downvotes? Did I say anything that is against the policies ? You don't need to upvote but what are the reasons for downvotes? These are genuine questions/challenges that I had when managing people's OKR. If you think they are not any problem at all, please help provide your opinions , it will greatly help me in understanding how to effectively use OKRs.
A not-mentioned problem with goals as strategy is simple. "The enemy gets a vote" on your strategy. Gen. Mattis was fond of saying this, but it's a classic military maxim. If your goals are relative to competitors, you can achieve all your intermediate goals and still fail.
You say "Objectives and Key Results"
I say "Pre-emptive Hierarchical Blamestorming"
OKRs further entrench hierarchies in a way that is harmful to productivity and harmony. They allow for a whole middle layer of management that simply decomposes their KRs and passes them down. The people below them are ultimately the ones on the hook for delivering, and if the middle manager doesn't achieve their own KRs, they already have an agreement about which person that reports to them is to blame. In my organisation OKRs are being used as a sort of feudal system whereby the peasants work the land, but the credit is passed up the chain to the seigneur.
This is particularly timely for me, since we covered Measure What Matters, the book mentioned in the blog post on OKRs, on an episode of our podcast that came out last weekend.[0]
I think you can sum up some of this blog post as discussing the difference between strategy and tactics. OKRs are tactical objectives that help you achieve your strategic goals. Is that a fair summary?
Other observations about OKRs that I would have liked to see included are:
- The article calls out how Measure What Matters and OKRs only work if the key results are legitimate metrics, real numbers as opposed to boolean flags: continuous system outputs. But at scale, some subteams just put their tasklists into OKRs as boolean KRs, make up a nebulous objective to cover them, and reimplement the same flawed systems that OKRs were meant to replace.
- Often OKRs are scoped beneath the team level to the personal level. This is very dangerous. The unit of production is not the individual but the team. You tend to create perverse incentives when you go one level lower, “I am an amazing employee because I didn't care about my struggling colleagues and ignored them and delivered 10 times as much work as them!”
- OKRs need to be understood as a management back-off to be effective, but this culture shift is relatively uncommon. If you look up the literature on setting good OKRs, you will find blog articles about SMART goalsetting or whatever, but very little about “OKRs are about treating your employees as research scientists. You are going to give them a goal to do research on, that is the objective, and you're going to open up the pocketbook and just say, how much grant money do you need to solve this objective. So that's why it's important that the objective makes the business money, you need to know how open the pocketbook is. Meanwhile, the KRs are important because research projects have a sort of inertia, by themselves they do not respect the Pareto principle to do the 20% work that drives 80% of the result. So you have to tell your researchers when it's okay to stop, they won't know that unless you tell them and they will keep tweaking to get that last 2% efficiency out of the system.” Tutorials just don't have this perspective!
- OKRs probably only make sense in terms of a complex system, so required reading should probably be Donella Meadows’ Thinking in Systems. In particular, you need to understand that for something to change often everything must change. People try to do these very tiny scoped OKRs and that's kind of risky. To get a complex system to change, often you just need to hold the output at some desired level, and allow the internals to reconfigure to provide that output. Nobody talks about OKR-induced organizational chaos, but ideally you should have one or two OKRs a year that really rearrange the entire system because they happened to be located at a bottleneck and they had to twist the system around until something else became the bottleneck.
>The unit of production is not the individual but the team
>management back-off
Agreed. My very first impression of OKRs was to see tham as business level User Stories. You state a desired outcome with enough detail to be clear and then get out of the way to let skilled people solve the problem with a little creative autonomy.
In the same way OKRs can float off into mission statement territory, they can get rendered ineffective in the other direction by being too prescriptive.
I'd like to see a follow-up article titled:
"Stop Letting OKRs masquerade as Work Breakdown Structure"
>> OKRs are tactical objectives that help you achieve your strategic goals.
While I agree that any distinction of strategy vs tactics was missing in the blog, I think the ORKs are too high level to qualify as tactics. Tactics are directly actionable. In that light, he may be wrong about OKRs not being strategy - they just need someone to figure out the HOW for each one and then it should all come together.
Institutionalized negging is something I've become more aware of over time. Powerful if evil way to control costs.
Once you see it happening to you or a friend you can begin to cast backward through your memory to identify other times when the same thing was happening but you just didn't have a name for it.
The only thing I remember about OKRs during my 10 years as a software engineer is zoning out when they talked about them at some length at company meetings.
For those who, like me, aren't up on the latest "best practice":
"Objectives and key results is a goal setting framework used by individuals, teams, and organizations to define measurable goals and track their outcomes. The development of OKR is generally attributed to Andrew Grove".
I have seen OKRs being badly implemented in different companies, the funniest things i have heard:
1. "we have easily achievable (100%) and hardly achievable (70%) okrs" where the 70% are just 100% achievable okrs + a bit that is impossible to achieve, also you HAVE to reach 70% ("70% is the new 100%")
2. "we have achieved 200% of our okr!!! <party face>"
3. "our KR is that the product needs to be at least as accurate as before" + several more acceptance criteria as KRs
the problem with these approaches is that people more easily follow a checklist and don't take time to understand the principles or even just do a trial and error approach to it for the sake of moving forward, so you end up with a roadmap masked as a KPIs list with non measurable KR and people being really confused about what's going on.
I kind of reject the premise of this Professor's argument. I use OKRs extensively up, down and across my business and at no point have I felt they masquerade for strategy.
You set a destination for the business through the creation of a vision and then create OKRs and KPIs to measure progress towards it and perhaps more importantly provide transparency.
It's simple, it just works, and I think this guy is just trying to be contrary for the sake of it.
Let me just inject some cynism into this: no executive ever thinks their strategic initiatives are anything other than the purest form of willpower given articulate form. At all the companies I've consulted for, OKRs inevitably run into either:
- Non-SMART formulated key results anywhere in the chain allow opportunistic employees and/or managers to spin tales about how they're doing great regardless of actual results.
- The executive team does not publish company-wide objectives in time for downstream teams to build their own objectives upon them, so the downstream teams just do what they've been wanting to do anyway and then spin a yarn about how it fits into the company-wide objectives when (and if) they arrive.
- Lack of responsibility, nothing happens if you fail to meet your KRs. Also nothing happens if you beat your stretch goals btw.
- Reorganizations every six months make a year-long planning cycle meaningless in the first place.
- The whole company failed the planned OKRs for the year so badly that the executive team just decided to not mention them ever again "for morale reasons". (True story)
- And many more.
Don't get me wrong, OKRs can be a powerful tool in small enough teams where the Principal-Agent problem is not yet rearing its head in force. But to say that it "just works" and has no problems is simply false.
Precisely.
I'm at an organization that tried to push OKRs but also doesn't even have quarterly objectives at a firm, org or department level most of the time.
If we cannot simply set goals for the next 3 months with any diligence, what business do we have setting pie-in-the-sky 5 year plans?
It's been my experience that most companies that try their hand at an OKR process are actually executives trying to answer "what the hell is everyone working on?"
This is pretty common in growth companies and new leaders that are still finding their rhythm for managing an executive team.
Sometimes there's absolutely value in the OKR process even if it's abandoned mid-game, such that it forces people into a mode of thinking and organization that helps them coalesce their ideas into more manageable and actionable plans.
I've worked for a couple different places now that did not "set a destination through a vision." They picked a destination as a number ("more money" or "more users" or similar) and then built OKRs from that number. There was no real strategy, just local maximization.
But then what does it mean if you didn't hit your numbers? Was your progress along the right path? Are you closer to being able to hit targets next year? Those execs couldn't tell you. Hell, even if you did hit your numbers, it was hard to get any sort of answer about how that tied in to what the company wanted to do next.
I've found it challenging to make sure that my team follows a sound process to explore the space of strategic options to achieve a given objective. I like to think of KRs as a mechanism to monitor and focus the execution of a selected path. KRs, alone, say very little about the quality of the strategic decision making process.
I believe the intent is very much for OKRs to enable innovation. They certainly do not "capture" it, though, since that would require doing the innovation first and then forming OKRs around it, and the whole point (in my limited understanding) of OKRs is to set out objectives that you don't know how to accomplish.
Come up with an objective, innovate in order to achieve it, keep yourself from going too far off track by tracking the results against thresholds you decided at the beginning (rather than adjusted or invented to match what's actually happening.) And somehow resist the temptation to invert the flow, where people justify what they're doing as fitting into an OKR rather than the OKR motivating their choice of what to do. (That's the part I'm getting wrong right now.)
OKRs serve one useful purpose: if you come across someone who seems to take them seriously, then you know for sure that they're delusional/crazy and should be designed around where practical.
